According to some of the most recent data available, there are over 3.32 million small businesses in California. If you’re thinking about adding to that total by starting your own business in this state, keep in mind that as with most, has its own particular set of rules to follow depending on the kind of business that you’re hoping to create. Whether you’re in San Diego, San Francisco or any other California city, there are a few things you should be aware of when starting up in a business here.
You May Be Eligible for ‘The California Competes Tax Credit’ program
Tax credits can be a big help to any business and the California Competes Tax Credit is something that certain businesses that want to grow in the Golden State can take advantage of. Unlike other states, such as Texas which offers a cash grant, it offers tax credits for businesses that achieve certain goals. Businesses of any size are eligible; however, small business are especially encouraged as 25 percent of the credit available each year is set aside for those that have $2 million or less in gross receipts during the previous year. Eligibility is based on the number of new jobs created as well as average salary, total investment, the impact to the economy and other criteria.
There are Many Cities That Help Increase the Odds of Creating a Successful Business
While Silicon Valley is famous for its tech companies, there’s a city that’s the ideal fit for just about every entrepreneur here some that offer rather impressive incentives. For example, Irvine in Southern California is home to the Orange County Small Business Development Center which is dedicated to helping small businesses. It provides training and even expert consulting.
Claim up to $26,000 per W2 Employee
- Billions of dollars in funding available
- Funds are available to U.S. Businesses NOW
- This is not a loan. These tax credits do not need to be repaid
Permits, Licenses and Other Musts
You’ll need to form an LLC or a corporation with the state and ensure that you comply with all local requirements such as obtaining a local business license and necessary permits. If you fail to do this, you can end up with stiff penalties. If you plan to sell any tangible personal property, you’ll need to get a seller’s permit from the California Board of Equalization. Your best bet, if you don’t have a business attorney (highly recommended), is to go to the CalGold website which can help you determine which permits and licenses will apply to your business. In addition, if you’re not physically located in California you might need to look into getting a registered agent.
Your business must comply with the American with Disabilities Act (ADA). Failure to do so can result in a lawsuit and significant expenses. The most frequent claims against businesses in California related to the ADA involve route and entry accessibility, parking, bathrooms and access within the facility. Be aware that the California Franchise Tax Board is quite vigilant about going after businesses that don’t file and pay their taxes. Hiring a qualified accountant can help you save money on your tax below and help you avoid tax pitfalls so that you can stay in business and grow your business successfully.